1) Yes, this article is about Apple's secret deal with China. But this is exactly the way deals are done in China. They are not going to be public about it and they are not going to admit that this investment has anything to do with keeping Apple's business going in China, but in reality, they absolutely are related if not causal.
2) This is not true. Apple used to allow VPN apps on the Chinese App Store up until one day several years ago that they couldn't fight it any more and were forced to take all of them down. It is not Apple going far beyond what was requested/needed to stay in business, they have zero incentive to do so unlike the local Chinese competitors who go all out on "precautious" censorship.
It is the same with Android - No VPN apps can be found from ANY app stores in China (Google Playstore is not even available in China). The only reason you can install an VPN app is via an .apk file and this is due to the technical design by Android vs. a closed ecosystem like Apple App Store. I don't think you can say a closed-source system is less morally reasonable at all. There are 10x or more malicious apps that steal user data on Android than Apple App Store due to lack of control and verification. It is just a consequence of two different technical design approaches.
Technically speaking, Chinese Android phone companies could just block 3rd-party apk installation anytime they want in the name of security (They already do that by default) and 99% users won't know how to circumvent it.
3) My entire post is actually trying to make a point that you, like most of the commenters in this thread, are idealists who vastly underestimate the value of being able to operate in these markets controlled by authoritarian regimes and reaching the end users.
Strategically, the most morally-reasonable way is to help the people in these countries by actually trying to be present even under severe pressures from the regimes to comply with their demands.
For example, Google's exit from China is actually a huge mistake. It is the best case scenario for the Chinese government and local Chinese competitors and worst case scenario for the Chinese people, Google and the rest of the free world. After the exit, Google handed their leading search engine market share to Baidu, which provides a much more proactively censored and twisted version of the search results, and the Chinese government gained complete control over the search engines. What used to take a lot of back and forth with Google to censor certain small things, is now a simple phone call to Baidu's Government Relations department to get the whole category wiped out.
Same thing happened with Android in China. You think the open-sourced model would bring any less censorship? Not at all. All of the Android App Stores in China are owned and controlled by local companies who comply 100% to government requests. And god knows how many malicious apps are in those app stores to eavesdrop users' private information. It is actually much harder to achieve the same effect with Apple's closed App Store and privacy features. You can buy 3rd party services to track the ID and location history of almost every Android phone sold in China, but this is not available for iPhone users.
So before you blame Apple for being a tool, in reality, they actually contribute much more to the freedom and privacy of the end users in these authoritarian markets. Without Apple, 100% phones would be tapped and there is little hurdle for these local governments to do whatever they want with the local companies.